Modified: March 11, 2020 10:55am
Created: March 11, 2020 10:27am
March 11, 2020
Wall Street uncertainty and sales tax losses could affect operations
With the stock market fluctuating and health officials advising people to avoid significant public interaction, Erie County Comptroller Stefan I. Mychajliw is advising Erie County lawmakers about the potential impact this uncertainty could have on Erie County’s finances.
“We just learned that the Town of Amherst and the New York State Amateur Hockey Association decided to play games without spectators. This could drop the number of hotel rooms booked, as well as decrease the number of families going to restaurants. This is just one example. I do not want to be an alarmist, nor do I want to downplay the seriousness of this illness. No doubt the financial impact will most certainly be felt here in Erie County,” said Comptroller Mychajliw.
It is also possible that revenue generated from the bed tax will decrease with tourism down nationally and globally. Just within the past 24 hours, youth hockey teams competing in the New York State Amateur Hockey Association state tournaments in Western New York have been told the games will go on, but with no fans in the stands. NYSAHA says Town of Amherst officials told the organization that the tournament may proceed, but without any spectators at the Northtown building.
Organizers then decided to extend that “no spectator” directive to all three area facilities hosting games. These tournaments typically host family members, friends and fans from across the state, and are great generators of sales tax revenue in area restaurants and hotels.
“Is it possible the global reaction to this disease is blown out of proportion and strictly reactionary? Yes, it is possible. That being said, regardless of the reaction, global, national, state and local finances will be impacted, and Erie County government needs to be prepared to manage the financial consequences and repercussions.”
In a letter sent to legislators, Comptroller Mychajliw advised lawmakers of some things to take into consideration as the community continues to deal with coronavirus.
“It can be deemed probable that fewer people, at least short-term, will be shopping, eating out, going to the theatre, or attending large public events. Since sales tax revenue is the primary funding source for most non-mandated services and programs in Erie County, it is anticipated, at least short-term, there will be less sales tax revenue coming in.”
“My goal is that this letter serves as a cautionary signal about the economic toll the coronavirus could ultimately have on Erie County’s finances, and to plan accordingly. My office will diligently monitor market fluctuations and other fiscal factors that could negatively impact county finances,” added Comptroller Mychajliw.
Comptroller Mychajliw also pointed to dramatic shifts in the stock market in recent weeks. New York State relies heavily on Wall Street receipts.
“Since so many programs in Erie County are state mandated, if the state’s bottom line suffers, then so, too, does Erie County’s,” he said.
The Erie County Comptroller added that he will continue to monitor market fluctuations and other fiscal factors that could negatively impact county finances, and will report them to county lawmakers accordingly.